We are pleased to announce the launch of The Glacier Sustainable World Enhancer. Investments, with a minimum of R100 000, will be accepted from 11 August until 16 September 2020. This solution follows on the back of the very successful Glacier Capital Enhancer and offers the investor all that the Capital Enhancer offered, and more.
Like the Capital Enhancer, the Glacier Sustainable World Enhancer is a five-year, tax-efficient, structured investment that lets you grow your capital with the certainty of capital protection, but also lets you contribute to sustainable development across the globe. It is set up in a sinking fund policy underwritten by Sanlam Life Insurance Limited.
In designing the Glacier Sustainable World Enhancer we had a few key goals in mind:
- provide investors with capital protection and an attractive, yet simple pay-off profile, and
- provide access across global developed markets, specifically for investors who often have concentrated exposure in SA.
Access to these global developed markets is achieved through exposure to the Solactive Sustainable Development Goals World RC 8 EUR index. The index considers companies, diversified across regions and sectors, that subscribe to environmental, social and governance standards, commonly referred to as ESG. The behaviour and product offerings of these companies further contribute to the Sustainable Development Goals of the United Nations. These goals address the challenges we face, and include poverty, inequality, climate change and environmental challenges.
Given the increased volatility in markets we had to consider an index that removes some of this uncertainty. Our chosen index does this in two ways:
- it manages volatility within an 8% volatility target by actively incorporating a cash allocation alongside the stocks, and
- allowance is made for a pre-defined annual dividend.
This dividend sacrifice and smoother return profile provides us with more efficient access to the market and attractive participation in positive returns.
Your capital over the five-year term is fully protected. So, if the portfolio has a negative return over the period, you still receive your initial investment amount back.
If the portfolio shows a positive return over the investment period, you have uncapped, enhanced exposure. At current pricing you’ll enjoy a return of four times (400%) the return of the global portfolio. This participation level is subject to market conditions and will be confirmed at the investment inception date. It won’t, however, be less than three times.
The Glacier Sustainable World Enhancer is particularly suitable for investors who:
- want exposure to a low volatility index that invests in global companies that contribute to the sustainable development goals of the United Nations;
- want to invest in equities with a more predictable outcome and capital protection;
- wish to invest for a period of five years and do not anticipate requiring access to the capital during this period;
- want access to global markets without exposure to currency exchange rate movements; and
- are comfortable to accept the default risk that comes with credit exposure to a leading global bank
The Glacier Sustainable World Enhancer as part of a diversified portfolio
The Glacier Sustainable World Enhancer is also a great way to diversify an existing portfolio as it protects you against any potential losses as well as uncertain returns.
In addition to this, the investment is tax-efficient and all returns are treated as capital gains and taken care of on your behalf. In addition to the tax advantages, there are estate planning advantages as well.
The case for ESG investments
Empirical evidence has shown that ESG investing can lead to improved risk-adjusted returns. By being more cognisant of the environment, our society and good corporate governance, investors not only realise their savings goals and achieve superior risk-adjusted returns, but they are also able to play an active role in transforming our world for the better.
More active participation in responsible investing is required, however. Addressing the multiple needs of our time cannot be the sole responsibility of governments, which is why we are providing you with additional opportunities to invest and make a change.